Three approaches were taken to add a drug-metabolizing system to limb bud culture; addition of a 9000 x g (S9) and microsomal fraction, both from mouse liver, and co-culture of limb buds with hamster embryo cells (HEC). The liver preparations were able to convert the teratogen cyclophosphamide to 5 separate metabolites which possessed alkylating activity. The high level of cytotoxicity caused by these preparations limits their usefulness in limb bud culture. HEC did not cause cytotoxicity, and were able to continue metabolism of cytophosphamide for three days. Analysis of the metabolites, however, indicated that HEC did not convert cyclophosphamide to the same products as the liver preparations. The metabolic products were capable of inducing abnormal limb development in vitro. Addition of 14C-cyclophosphamide in the presence of HEC activating system led to uptake of radioactivity into limb buds. In the absence of HEC, little radioactivity was detected in the target tissue. These results suggest that culturing intact cells capable of MFO metabolism with limb buds may be the most likely method to follow in achieving in vitro activation of chemicals.